Minimum Energy Efficiency Rules for your Property

May 10th 2018

Minimum Energy Efficiency Rules for your Property

As from the 1 April 2018, landlords and property owners need to be even more alert to how energy efficient their property is. The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 has established a minimum standard energy efficiency rating for all domestic and non-domestic properties that are let to tenants.

The energy efficiency rating of a property is calculated and recorded in an Energy Performance Certificate (EPC) which rates properties from band A to band G, with A being the most energy efficient.

The minimum standard rating imposed by the new regulations means that from 1 April 2018, landlords of privately rented domestic and non-domestic properties may not grant a tenancy to new or existing tenants if their property has an EPC rating of band F or G. The current minimum rating is E.

Properties with a rating of F or G are classed as ‘sub-standard’. Sub-standard does not reflect the structural or decorative state of a property.

Landlords will face financial penalties, which are to be imposed by local councils, if they grant a new tenancy (whether that be to a new or existing tenant) after 1 April 2018 where their property is sub-standard. Therefore, landlords will need to consider making improvements to their property to increase its energy efficiency before they let it.

However, if a landlord of a sub-standard property already has a tenant in place and the tenancy agreement does not need to be renewed, then the landlord will have longer to make improvements to their property. For domestic properties, this date is 1 April 2020 but for non-domestic properties the date is 1 April 2023.

If your property is still below the minimum standard at that date you must not be continue to let it, even to existing tenants. There are some exemptions that a landlord may be able to comply with. For example, the new regulations do not apply to all properties as some listed buildings and some holiday lets will be exempt.

The regulations pose obvious problems for landlords who could be left with properties they can no longer lawfully let. On top of this, tenants may find that they can no longer lawfully let their house or business premises from their landlord.

EPCs are valid for 10 years, but if works are carried out to improve the rating of a property then a new EPC can be commissioned.

Our team at Temple Heelis can provide you with advice on your property, whether you are a tenant or a landlord or thinking of becoming one. We can review your existing tenancy agreement, assist with drafting a new agreement and advise on when an EPC is required. We recommend seeking legal advice at the earliest possible opportunity, therefore please call and speak to a member of our residential or commercial property department today.